1 00:00:22,320 --> 00:00:25,919 Speaker 1: Hello, and welcome to the Australian's Money Puzzle podcast. I'm 2 00:00:26,000 --> 00:00:29,640 Speaker 1: James Kirby, Welsh editor at The Australian. Now welcome aboard 3 00:00:29,640 --> 00:00:32,720 Speaker 1: of your body. My guest today is a special guest, 4 00:00:32,840 --> 00:00:38,120 Speaker 1: a special guest with a capital G. He is quite 5 00:00:38,159 --> 00:00:42,519 Speaker 1: simply the doyene really of personal and finance investment in 6 00:00:42,560 --> 00:00:49,239 Speaker 1: Australia's author of many financial books, including Making Money Made Simple, 7 00:00:49,479 --> 00:00:53,080 Speaker 1: which is I would reckon on just about every shelf 8 00:00:53,520 --> 00:00:57,800 Speaker 1: of every home that anyone whoever really wanted to get 9 00:00:57,800 --> 00:01:01,080 Speaker 1: a grab on how it all works. I see it's 10 00:01:01,120 --> 00:01:05,119 Speaker 1: in twenty He's had twenty five editions of that book, 11 00:01:05,160 --> 00:01:07,880 Speaker 1: which has got to be a record. It's of course 12 00:01:08,480 --> 00:01:11,120 Speaker 1: no Whittaker, and I'm delighted to have him on the show. 13 00:01:11,200 --> 00:01:14,760 Speaker 1: He's just produced his latest book, which is called Will's 14 00:01:15,200 --> 00:01:20,360 Speaker 1: The Death and Taxes Made Simple. I know, how are you, hi, James. 15 00:01:20,480 --> 00:01:22,200 Speaker 2: Great to be with you. I've been a great fan 16 00:01:22,240 --> 00:01:24,360 Speaker 2: of your podcast for a long time, so it's great 17 00:01:24,440 --> 00:01:25,320 Speaker 2: to talk. 18 00:01:25,680 --> 00:01:27,959 Speaker 1: Oh, thank you very much, Thank you very much. Well 19 00:01:28,000 --> 00:01:30,959 Speaker 1: there you are. Mutual admiration Society of two straight away. 20 00:01:31,319 --> 00:01:34,119 Speaker 1: But they tell me about the Yeah, Making Money Made Simple. 21 00:01:34,160 --> 00:01:37,520 Speaker 1: I presume that's your biggest seller of all the books, 22 00:01:37,560 --> 00:01:38,959 Speaker 1: is it. I'm only guessing yes. 23 00:01:39,080 --> 00:01:41,560 Speaker 2: I would think so when so many people call it 24 00:01:41,720 --> 00:01:47,280 Speaker 2: making money made easy and there's no connection between simple 25 00:01:47,360 --> 00:01:52,440 Speaker 2: and easy. It's simple, but simple need not be easy. 26 00:01:53,760 --> 00:01:56,800 Speaker 1: We have a joke basically inside the Australian now that 27 00:01:56,840 --> 00:02:01,920 Speaker 1: we can see so easily how stories perform and all that, 28 00:02:02,800 --> 00:02:05,120 Speaker 1: and you can measure, you know, how many people read it, 29 00:02:05,280 --> 00:02:07,920 Speaker 1: how long did they read it for et cetera. If 30 00:02:07,920 --> 00:02:10,040 Speaker 1: we have a joke that, like in personal finance, if 31 00:02:10,080 --> 00:02:12,320 Speaker 1: you if you want a story to go really well, 32 00:02:12,400 --> 00:02:14,120 Speaker 1: all you have to do is put a headline on 33 00:02:14,160 --> 00:02:17,640 Speaker 1: it which says like how to make a million easy, 34 00:02:18,800 --> 00:02:21,400 Speaker 1: and it will always be read because there's always this demand, 35 00:02:21,440 --> 00:02:26,200 Speaker 1: isn't there. There's always this uh, misapprehension. I suppose that 36 00:02:26,720 --> 00:02:30,560 Speaker 1: you can make money easily or without taking a risk 37 00:02:30,680 --> 00:02:33,120 Speaker 1: or without thinking about it, and I think that's something 38 00:02:33,160 --> 00:02:36,799 Speaker 1: that you've always worked on and challenged really but at 39 00:02:36,800 --> 00:02:39,919 Speaker 1: the same time as you say it can be done well. 40 00:02:39,919 --> 00:02:44,480 Speaker 2: Look, I've never been one for sensational headlines market right 41 00:02:44,560 --> 00:02:47,680 Speaker 2: the headline market's about to crash. 42 00:02:47,040 --> 00:02:49,120 Speaker 1: Yes, and it would do well. No, it would it 43 00:02:49,120 --> 00:02:49,760 Speaker 1: would do well. 44 00:02:49,919 --> 00:02:52,680 Speaker 2: Yes, we do very well. But the whole thing about 45 00:02:52,720 --> 00:02:58,440 Speaker 2: making money is it happens slowly and compoundies is the secret. 46 00:02:59,240 --> 00:03:03,639 Speaker 2: Compounding slow to start and gets faster and faster as 47 00:03:03,760 --> 00:03:07,200 Speaker 2: time passes. I tell the story of the lily in 48 00:03:07,240 --> 00:03:11,680 Speaker 2: the pond that doubles every day and fills the pond 49 00:03:11,760 --> 00:03:16,000 Speaker 2: in ten days. How long to goo from quarter full 50 00:03:16,400 --> 00:03:20,800 Speaker 2: to full? The answer is two days, quarter to half 51 00:03:20,840 --> 00:03:26,000 Speaker 2: on the ninth, and half fall to fall on the tenth. Now, 52 00:03:26,040 --> 00:03:30,280 Speaker 2: if that ten days is your investment time frame, and 53 00:03:30,440 --> 00:03:34,800 Speaker 2: you because you start late or cash early, if you've 54 00:03:34,800 --> 00:03:37,920 Speaker 2: only got eight days, you miss out on three quarters 55 00:03:38,520 --> 00:03:42,040 Speaker 2: of what you would have had. Basically, investment, it's all 56 00:03:42,080 --> 00:03:43,120 Speaker 2: about time in. 57 00:03:44,800 --> 00:03:47,680 Speaker 1: And I suppose the corollary of that is to start 58 00:03:47,720 --> 00:03:50,280 Speaker 1: as soon as you possibly can always. 59 00:03:51,240 --> 00:03:53,840 Speaker 2: I spoke to Blake last week. He's now worth about 60 00:03:53,880 --> 00:03:57,120 Speaker 2: four hundred million. He said, I was in school at 61 00:03:57,160 --> 00:03:59,760 Speaker 2: fifteen and you came and gave a talk to the kids, 62 00:04:00,040 --> 00:04:03,320 Speaker 2: and you talked about compound interest, and that was life 63 00:04:03,440 --> 00:04:04,080 Speaker 2: changing for me. 64 00:04:06,120 --> 00:04:09,360 Speaker 1: Yes, it's something I think that's even more relevant now 65 00:04:09,400 --> 00:04:15,480 Speaker 1: with property prices, where perhaps earlier generations it was a choice, 66 00:04:15,920 --> 00:04:17,919 Speaker 1: would you like to be wealthy. Would you like to 67 00:04:17,960 --> 00:04:21,599 Speaker 1: make money? This current generation, it's like, if you want 68 00:04:21,640 --> 00:04:25,440 Speaker 1: to buy a house, you have to make money, you 69 00:04:25,560 --> 00:04:28,840 Speaker 1: must make that deposit. It's become more compulsory, or at 70 00:04:28,920 --> 00:04:32,120 Speaker 1: least mandatory. I think for this generation than your generation 71 00:04:32,279 --> 00:04:32,919 Speaker 1: or my generation. 72 00:04:33,040 --> 00:04:35,719 Speaker 2: I think, well, well, I think back about nineteen seventy five. 73 00:04:35,800 --> 00:04:39,680 Speaker 2: We were building houses and the house was thirty thousand 74 00:04:39,680 --> 00:04:44,080 Speaker 2: dollars in Brisbane, a low set brick network two years income, 75 00:04:45,080 --> 00:04:49,560 Speaker 2: and people borrowed money at fourteen percent. The same house 76 00:04:49,960 --> 00:04:53,880 Speaker 2: is ten times dearer at eight hundred thousand dollars. So 77 00:04:54,440 --> 00:04:57,360 Speaker 2: they've just got so much more expensive in real terms. 78 00:04:57,480 --> 00:04:58,279 Speaker 2: That's the problem. 79 00:04:58,480 --> 00:05:02,039 Speaker 1: It's the problem. I I'm want to talk about your 80 00:05:02,040 --> 00:05:04,480 Speaker 1: book in a second and the issues. I said, I'll 81 00:05:04,520 --> 00:05:06,760 Speaker 1: ask you one quick thing if I could. Had a 82 00:05:06,800 --> 00:05:11,160 Speaker 1: guest on Tuesday, Duncan Perkins, an accountant who was very good, 83 00:05:11,560 --> 00:05:13,760 Speaker 1: and we mentioned on the show that you were coming 84 00:05:13,800 --> 00:05:18,239 Speaker 1: on today, and he said, Noel is very skeptical about 85 00:05:18,279 --> 00:05:23,440 Speaker 1: investment property and that he certainly was of the impression 86 00:05:23,440 --> 00:05:26,320 Speaker 1: that you believe that in terms of making money, there's 87 00:05:26,360 --> 00:05:29,640 Speaker 1: a lot of easier ways and more reliable ways than 88 00:05:29,720 --> 00:05:33,440 Speaker 1: investment property. Our shows on Tuesday tend to concentrate on 89 00:05:33,520 --> 00:05:36,240 Speaker 1: investment property. Is that your sort of disposition. 90 00:05:36,760 --> 00:05:39,159 Speaker 2: It's been my experience times. 91 00:05:40,200 --> 00:05:40,360 Speaker 1: Right. 92 00:05:40,520 --> 00:05:43,640 Speaker 2: I'm sold a property for seven hundred thousand, which cost 93 00:05:43,760 --> 00:05:46,599 Speaker 2: me two hundred and twenty thousand in two thousand, that's 94 00:05:46,680 --> 00:05:50,560 Speaker 2: twenty four years. My money in shares would be worth 95 00:05:50,640 --> 00:05:53,960 Speaker 2: in the index, which will be worth one point five 96 00:05:54,279 --> 00:05:58,560 Speaker 2: million dollars. Now I solwed this because I got sick 97 00:05:58,600 --> 00:06:01,320 Speaker 2: of it. I had to sell it. Now I'm going 98 00:06:01,360 --> 00:06:05,080 Speaker 2: to pay one hundred thousand capital gains tax that would 99 00:06:05,120 --> 00:06:08,840 Speaker 2: have been in shares. There's never a need to sell. 100 00:06:09,560 --> 00:06:11,680 Speaker 2: So if you've got property, you need to turn it 101 00:06:11,720 --> 00:06:14,480 Speaker 2: over and make it better and improve it. And that's 102 00:06:14,480 --> 00:06:18,920 Speaker 2: got massive costs, plus the land tax and the rates 103 00:06:19,040 --> 00:06:23,240 Speaker 2: and the insurance. You buy an index fund which requires 104 00:06:23,279 --> 00:06:27,880 Speaker 2: no decisions and your set and forget. It's done nine 105 00:06:27,920 --> 00:06:32,240 Speaker 2: percent total for one hundred and twenty years. It's hands 106 00:06:32,279 --> 00:06:33,200 Speaker 2: down the best. 107 00:06:34,040 --> 00:06:37,159 Speaker 1: Right, Okay, But I suppose you you would allow that 108 00:06:37,240 --> 00:06:41,320 Speaker 1: every property is individual and there will always be individual 109 00:06:41,360 --> 00:06:44,120 Speaker 1: properties always. 110 00:06:44,200 --> 00:06:47,919 Speaker 2: But the thing is, there's no such animal as the 111 00:06:48,040 --> 00:06:51,960 Speaker 2: property market. There might be point Piper and cans and 112 00:06:52,040 --> 00:06:55,320 Speaker 2: madeer and perth, you know, and some are going well 113 00:06:55,400 --> 00:06:58,479 Speaker 2: and some aren't. About shares, you can start with bug 114 00:06:58,560 --> 00:07:01,480 Speaker 2: roll anyway, that's the great thing bout shit it is. 115 00:07:01,880 --> 00:07:05,360 Speaker 1: It is absolutely okay, terrific. Now, let's talk about your 116 00:07:05,400 --> 00:07:09,520 Speaker 1: new book, which I can tell you like everyone else, 117 00:07:09,560 --> 00:07:13,520 Speaker 1: I'm only human. And it's many people have asked to 118 00:07:13,520 --> 00:07:17,280 Speaker 1: come on the show and talk about wills and estate planning, 119 00:07:17,720 --> 00:07:21,800 Speaker 1: and I have resisted it because I think someone has 120 00:07:21,800 --> 00:07:24,880 Speaker 1: to be very good and very articulous to actually make 121 00:07:24,920 --> 00:07:28,000 Speaker 1: it interesting. And you've just done this book on this 122 00:07:28,120 --> 00:07:30,520 Speaker 1: whole area, and you have a couple of things you 123 00:07:30,600 --> 00:07:32,240 Speaker 1: really a couple of points I know that you really 124 00:07:32,280 --> 00:07:35,320 Speaker 1: wanted to make. One was about to review reviewing your 125 00:07:35,440 --> 00:07:40,680 Speaker 1: will regularly. If you don't review your will regularly, it 126 00:07:40,720 --> 00:07:42,080 Speaker 1: doesn't become non and void. 127 00:07:43,440 --> 00:07:45,880 Speaker 2: Now, it doesn't become null and void, but it might 128 00:07:45,920 --> 00:07:49,680 Speaker 2: be out of date. I mean, since you might do well. 129 00:07:49,680 --> 00:07:52,880 Speaker 2: Most people might be will at age forty eight. The 130 00:07:53,000 --> 00:07:55,200 Speaker 2: reason is that's when their parents are writy and they're 131 00:07:55,240 --> 00:08:01,480 Speaker 2: thinking about the inherence. You know. But you may have 132 00:08:01,560 --> 00:08:05,360 Speaker 2: extra kids, There may be relationship breakdowns. One of your 133 00:08:05,400 --> 00:08:08,280 Speaker 2: kids might have got divorced, there's also you may have 134 00:08:08,400 --> 00:08:13,840 Speaker 2: changed houses. It's important that your estate reflects the circumstances 135 00:08:13,880 --> 00:08:17,040 Speaker 2: of the time. That's why we say at least every 136 00:08:17,080 --> 00:08:20,320 Speaker 2: three or four years review you will, but don't forget 137 00:08:20,320 --> 00:08:23,400 Speaker 2: to you. It's four specialties a state planning is law 138 00:08:24,800 --> 00:08:29,040 Speaker 2: and tax and superannuation and all the financial planning stuff 139 00:08:29,040 --> 00:08:32,800 Speaker 2: such as age care. So it's a multi dissamer area. 140 00:08:33,800 --> 00:08:38,600 Speaker 1: Yes, every four years is your recommendation. 141 00:08:38,520 --> 00:08:41,080 Speaker 2: Well, not so much. That's so much every time there's 142 00:08:41,080 --> 00:08:42,280 Speaker 2: a change of circumstance. 143 00:08:42,360 --> 00:08:45,520 Speaker 1: Yeah, yeah, or life major life events. Major life events, 144 00:08:45,760 --> 00:08:48,720 Speaker 1: I mean very obvious ones, being a divorce for instance. 145 00:08:48,800 --> 00:08:52,960 Speaker 2: Okay, all the parents' death, you know, or parents to 146 00:08:53,080 --> 00:08:57,959 Speaker 2: age care. Also, these days, people are living longer and 147 00:08:58,200 --> 00:09:02,640 Speaker 2: all the relationships are becoming more common. There's two couples 148 00:09:02,679 --> 00:09:05,720 Speaker 2: and one partner dies in each and they re partner 149 00:09:07,000 --> 00:09:10,080 Speaker 2: and that's a whole new ball game. Again. They want 150 00:09:10,160 --> 00:09:12,959 Speaker 2: to keep their money for each side. They don't want 151 00:09:12,960 --> 00:09:15,400 Speaker 2: it intermingled. 152 00:09:16,480 --> 00:09:20,079 Speaker 1: You're right, Okay, So let's say that happens. Then what 153 00:09:20,160 --> 00:09:23,640 Speaker 1: would be the pathway for that in the case where 154 00:09:23,720 --> 00:09:28,560 Speaker 1: the couple remarried, where the two individuals who were left widowed, 155 00:09:28,559 --> 00:09:32,000 Speaker 1: if you like, remarried, and they came to you or 156 00:09:32,040 --> 00:09:34,120 Speaker 1: someone like you, what would your advice? What would your 157 00:09:34,160 --> 00:09:34,680 Speaker 1: advice be? 158 00:09:35,760 --> 00:09:38,560 Speaker 2: Well, first of all, people don't understand, but you can 159 00:09:38,640 --> 00:09:41,520 Speaker 2: have a house as joint tenants or as tenants in common. 160 00:09:43,160 --> 00:09:48,400 Speaker 2: On death, joint tenancy automatically goes to the survivor, and 161 00:09:48,480 --> 00:09:51,920 Speaker 2: that's the way most young couples hold the house. But 162 00:09:52,000 --> 00:09:55,640 Speaker 2: if you're a second relationship, as normally tenants in common, 163 00:09:56,360 --> 00:10:00,640 Speaker 2: so you could individually leave your share to your inside. 164 00:10:01,840 --> 00:10:04,760 Speaker 2: There's also a trick. Let's say that a couple marry 165 00:10:04,760 --> 00:10:08,680 Speaker 2: and they resource her and little bit out of balance, 166 00:10:09,640 --> 00:10:11,800 Speaker 2: and say that she gets sick and needs to go 167 00:10:11,880 --> 00:10:15,560 Speaker 2: to a nursing home. He pays the half a million 168 00:10:15,600 --> 00:10:19,560 Speaker 2: dollars for the bond on her death that goes to 169 00:10:19,600 --> 00:10:22,440 Speaker 2: her estate automatically. So who's a state is missed out 170 00:10:22,480 --> 00:10:26,440 Speaker 2: on half a million dollars. Now, the way around that 171 00:10:26,640 --> 00:10:28,400 Speaker 2: is he makes a line to her of half a 172 00:10:28,400 --> 00:10:35,200 Speaker 2: million dollars. Problem solved. It's easier to solve a problem 173 00:10:35,240 --> 00:10:35,800 Speaker 2: in advance. 174 00:10:37,080 --> 00:10:41,080 Speaker 1: It is, of course, yes, a clearness I wanted just 175 00:10:41,160 --> 00:10:43,880 Speaker 1: on that whole area. And it's a difficult area, of course, 176 00:10:43,920 --> 00:10:47,719 Speaker 1: it is. And age care and aging of Australia with 177 00:10:47,840 --> 00:10:52,800 Speaker 1: a huge issue, and finally some breakthrough in recent times 178 00:10:52,800 --> 00:10:55,920 Speaker 1: about each care which cut to the chase. Basically, people 179 00:10:55,920 --> 00:10:58,520 Speaker 1: who are self funder retirees may end up paying about 180 00:10:58,600 --> 00:11:01,640 Speaker 1: nine thousand dollars more works then they might have been 181 00:11:01,720 --> 00:11:03,240 Speaker 1: under the old regime. 182 00:11:03,360 --> 00:11:07,680 Speaker 2: And age care is the most complex topic I. 183 00:11:07,679 --> 00:11:13,440 Speaker 1: Know, yes, and it's a it's difficult. I mean it's 184 00:11:13,480 --> 00:11:19,120 Speaker 1: difficult for everybody, the including the sons and daughters of 185 00:11:19,240 --> 00:11:25,359 Speaker 1: the person, who are only human and in making decisions 186 00:11:25,360 --> 00:11:29,679 Speaker 1: financially for their parents. Only someone with no emotions that 187 00:11:29,800 --> 00:11:33,360 Speaker 1: all could could separate the fact that their inheritance is 188 00:11:33,400 --> 00:11:36,559 Speaker 1: shrinking basically on the basis of some of the decisions 189 00:11:36,559 --> 00:11:39,560 Speaker 1: they might make in relation to age care. That's that's 190 00:11:39,559 --> 00:11:42,160 Speaker 1: something that everybody has to face. One of the things 191 00:11:42,520 --> 00:11:46,680 Speaker 1: you bring up during powers of attorney which sounds could 192 00:11:46,720 --> 00:11:49,640 Speaker 1: you first of all explain what that is? And I 193 00:11:49,720 --> 00:11:52,800 Speaker 1: just want to explain also I want to bring up 194 00:11:52,840 --> 00:11:55,480 Speaker 1: the point then as to it sounds great, but what 195 00:11:55,559 --> 00:11:57,439 Speaker 1: if the person says. 196 00:11:58,720 --> 00:11:58,760 Speaker 2: No. 197 00:11:59,679 --> 00:12:03,040 Speaker 1: If the person says yeah, when it comes to that 198 00:12:03,200 --> 00:12:06,720 Speaker 1: stage that I have lost my capacity, I'll sign it. 199 00:12:07,200 --> 00:12:09,600 Speaker 1: But of course it's to late them. I bet it 200 00:12:09,640 --> 00:12:11,439 Speaker 1: happens all the time, but could you expland what the 201 00:12:11,559 --> 00:12:13,840 Speaker 1: joint powers of attorney is and the issues around that. 202 00:12:14,600 --> 00:12:17,839 Speaker 2: There there will be a time in most people's lives 203 00:12:17,840 --> 00:12:22,520 Speaker 2: when they don't have capacity, and therefore the enduring power 204 00:12:22,520 --> 00:12:27,400 Speaker 2: of attorney exists as long as they are alive. Many 205 00:12:27,520 --> 00:12:31,240 Speaker 2: people think it survives thee deceased, and it doesn't. Many 206 00:12:31,320 --> 00:12:33,720 Speaker 2: widows have rushed down to the bank with the document 207 00:12:34,000 --> 00:12:38,120 Speaker 2: to be told it doesn't work anymore. But I stress 208 00:12:38,160 --> 00:12:41,439 Speaker 2: in the book you need to rehearse it now in 209 00:12:41,520 --> 00:12:45,880 Speaker 2: case reasons. I heard about woman was a widow, two 210 00:12:45,960 --> 00:12:49,080 Speaker 2: kids had the endearing powers of attorney. They go to 211 00:12:49,120 --> 00:12:51,960 Speaker 2: the bank to withdraw five hundred thousand for the bond. 212 00:12:53,120 --> 00:12:57,240 Speaker 2: Bank says a power of attorney is not valid because 213 00:12:57,280 --> 00:13:02,800 Speaker 2: the kids signed before the widow and the document is 214 00:13:02,920 --> 00:13:07,120 Speaker 2: giving power. So those who accept the pair can't sign 215 00:13:07,200 --> 00:13:13,760 Speaker 2: before the giver said, simply solved will get the attorneys 216 00:13:13,800 --> 00:13:19,760 Speaker 2: to resign. Banks, says I I one quite accept that, 217 00:13:19,400 --> 00:13:22,560 Speaker 2: and that they go to the court because banks can 218 00:13:22,640 --> 00:13:24,920 Speaker 2: be very difficult, extremely difficult. 219 00:13:25,200 --> 00:13:27,640 Speaker 1: Just just backtrack for a second. So during powers of attorney, 220 00:13:27,679 --> 00:13:31,280 Speaker 1: it's a situation where For instance, I have a very 221 00:13:31,280 --> 00:13:35,920 Speaker 1: old parent and that very old parent, or I or 222 00:13:35,960 --> 00:13:38,720 Speaker 1: anyone like me has a very old parent, and we 223 00:13:38,880 --> 00:13:42,679 Speaker 1: know that parent is fine, but we also know that 224 00:13:43,080 --> 00:13:46,160 Speaker 1: in whatever the three or four years time they're going 225 00:13:46,200 --> 00:13:50,720 Speaker 1: to the statistics would suggest that they're going to find 226 00:13:50,720 --> 00:13:54,400 Speaker 1: it too hard to pay their bills, to manage things, 227 00:13:54,559 --> 00:13:59,360 Speaker 1: and signed documents. So as a preemptive measure as a 228 00:13:59,440 --> 00:14:02,880 Speaker 1: defense for them, to help them and to help the 229 00:14:02,960 --> 00:14:06,600 Speaker 1: family have all this done properly, the present suggests, Hey 230 00:14:06,679 --> 00:14:09,520 Speaker 1: dad or hey mom, there's a thing called enduring power 231 00:14:09,520 --> 00:14:12,000 Speaker 1: of attorney, and if you sign it, it means that 232 00:14:12,080 --> 00:14:14,959 Speaker 1: I'll be able to manage your affairs for you on 233 00:14:15,000 --> 00:14:19,000 Speaker 1: your behalf should you lose capacity. Now, that's the enduring 234 00:14:19,040 --> 00:14:24,480 Speaker 1: property what But how often do you think they work 235 00:14:24,560 --> 00:14:27,600 Speaker 1: and how often do you think the older person resists? 236 00:14:29,000 --> 00:14:32,680 Speaker 2: Well, I think the older person is usually amenable to it. 237 00:14:33,760 --> 00:14:37,240 Speaker 2: The trouble is when you try to use it, if 238 00:14:37,240 --> 00:14:39,920 Speaker 2: the bank doesn't accept it, or worse still, if you 239 00:14:40,000 --> 00:14:42,640 Speaker 2: can't find it. I heard about a guard headed the will, 240 00:14:42,840 --> 00:14:46,200 Speaker 2: the power of attorney and the advance Health Directive and 241 00:14:46,280 --> 00:14:50,960 Speaker 2: put them all in the safe and the kids needed 242 00:14:50,960 --> 00:14:54,520 Speaker 2: the court order to get them. So those documents need 243 00:14:54,560 --> 00:14:55,400 Speaker 2: to be available. 244 00:14:56,400 --> 00:14:58,480 Speaker 1: Okay, so what's the perfect way to do it. 245 00:15:00,160 --> 00:15:03,880 Speaker 2: Well, you need the documents and your family should know 246 00:15:03,920 --> 00:15:05,800 Speaker 2: about them. One of the things to be covered in 247 00:15:05,840 --> 00:15:08,120 Speaker 2: the book is a lot of people now prepay their 248 00:15:08,160 --> 00:15:12,520 Speaker 2: funerals because you can pay fifteen thousand, five hundred dollars 249 00:15:12,560 --> 00:15:17,040 Speaker 2: a big exempt from Santlowick. It's a good age pension strategy. 250 00:15:18,280 --> 00:15:22,800 Speaker 2: But it's too late when you're all in church to 251 00:15:22,960 --> 00:15:27,960 Speaker 2: find out that you've prepaid a different funeral director. But 252 00:15:28,240 --> 00:15:31,320 Speaker 2: very important the kids know if it's a prepaid funeral, 253 00:15:31,360 --> 00:15:36,120 Speaker 2: who's got it? I hear time and time again. Ah. 254 00:15:36,160 --> 00:15:38,840 Speaker 2: We went through mum's stuff and all the things we 255 00:15:39,000 --> 00:15:42,880 Speaker 2: found you couldn't believe it. One person said all the 256 00:15:43,520 --> 00:15:45,320 Speaker 2: books were full of banknotes. 257 00:15:46,360 --> 00:15:51,000 Speaker 1: Yes, at least with banknotes you don't have to seek 258 00:15:51,040 --> 00:15:53,840 Speaker 1: anyone that say advice about how to access them. Okay, 259 00:15:53,880 --> 00:15:57,080 Speaker 1: here we'll take a short break. I'll will be back 260 00:15:57,080 --> 00:16:07,160 Speaker 1: in a moment. Hello and welcome back to The Australian's 261 00:16:07,160 --> 00:16:10,920 Speaker 1: Money Caused podcast. James Kirby here talking to Noel Whittaker, 262 00:16:11,080 --> 00:16:15,520 Speaker 1: the author and finance commentator. The original of the species folks. 263 00:16:15,600 --> 00:16:20,240 Speaker 1: Long before many of us, including myself, were on the scene, 264 00:16:20,480 --> 00:16:23,360 Speaker 1: Noel really was guiding light and how to do this 265 00:16:23,480 --> 00:16:26,520 Speaker 1: and how to talk to the general public about specific 266 00:16:26,760 --> 00:16:30,000 Speaker 1: financial issues. And you must remember today we've got podcasts 267 00:16:30,120 --> 00:16:33,720 Speaker 1: and a lot of coverage in newspapers, et cetera. But 268 00:16:33,720 --> 00:16:36,360 Speaker 1: there was a time when there was very little. You 269 00:16:36,440 --> 00:16:38,800 Speaker 1: had to be quite wealthy to get advice. You need 270 00:16:38,840 --> 00:16:40,960 Speaker 1: to be quite wealthy to even use a stock broker, 271 00:16:41,000 --> 00:16:43,960 Speaker 1: and people like Noel really broke the mold in this area. 272 00:16:44,360 --> 00:16:46,600 Speaker 1: No one of the things that you mentioned about in 273 00:16:46,680 --> 00:16:48,760 Speaker 1: terms of and it's hard to there's only so much 274 00:16:48,800 --> 00:16:52,280 Speaker 1: we can cover today. But in the past, wills were everything, right, 275 00:16:52,360 --> 00:16:55,880 Speaker 1: the will was the big thing. Yes, Now enormous amounts 276 00:16:55,920 --> 00:16:59,520 Speaker 1: of money are now in super and we're compulsory super. 277 00:16:59,560 --> 00:17:03,440 Speaker 1: There's a whole generation coming through where you know, outside 278 00:17:03,480 --> 00:17:05,800 Speaker 1: of the family home, most of the money might be 279 00:17:05,840 --> 00:17:08,680 Speaker 1: in super. There mightn't be anything really but talking about 280 00:17:08,760 --> 00:17:10,720 Speaker 1: outside of super. If they put all their money in 281 00:17:10,840 --> 00:17:16,240 Speaker 1: super and then after they pass on, it's all about 282 00:17:16,280 --> 00:17:20,359 Speaker 1: how the super is passed on. Can you give some 283 00:17:20,480 --> 00:17:23,040 Speaker 1: information about how that should be done properly? 284 00:17:23,560 --> 00:17:27,880 Speaker 2: Well, the first big issue James is you will does 285 00:17:27,960 --> 00:17:32,160 Speaker 2: not determine who gets you super. The trustee of your 286 00:17:32,200 --> 00:17:35,199 Speaker 2: fund is the person who decides who gets the super. 287 00:17:36,440 --> 00:17:40,320 Speaker 2: They can do a binding death benefit nomination that tells 288 00:17:40,320 --> 00:17:43,240 Speaker 2: the trustee what they got to do. But I think 289 00:17:43,280 --> 00:17:45,920 Speaker 2: the big dang is the death tax. Now most people 290 00:17:45,960 --> 00:17:49,919 Speaker 2: don't understand the death tax. Now, your super has a 291 00:17:49,960 --> 00:17:55,760 Speaker 2: taxable component that's contributions and earnings, and the only exempt 292 00:17:55,760 --> 00:17:58,160 Speaker 2: component is stuff you've made from your own after text 293 00:17:58,200 --> 00:18:03,679 Speaker 2: dollars out. That's fine enough lift to a dependent and 294 00:18:03,760 --> 00:18:06,119 Speaker 2: your partners all was dependent. But if that'st lift to 295 00:18:06,160 --> 00:18:09,760 Speaker 2: a non dependent as a seventeen percent tax on death. 296 00:18:11,119 --> 00:18:13,879 Speaker 1: So just for the listeners, just to clarify on this 297 00:18:13,920 --> 00:18:19,520 Speaker 1: one people, nowadays, the amount we're paying in compulsory super, 298 00:18:19,640 --> 00:18:22,720 Speaker 1: for most people, it's so much that it's all they 299 00:18:22,760 --> 00:18:25,200 Speaker 1: put in, right, They don't volunteer anything else. And so 300 00:18:25,640 --> 00:18:28,920 Speaker 1: what you're saying is, let's say for the average Australian 301 00:18:29,400 --> 00:18:32,680 Speaker 1: in twenty years time, their super will be made up 302 00:18:32,760 --> 00:18:35,359 Speaker 1: probably I don't know, eighty or ninety percent will be 303 00:18:35,560 --> 00:18:39,240 Speaker 1: compulsory super that was put in by law, and that 304 00:18:39,440 --> 00:18:44,200 Speaker 1: money that should they seek in the future to pass 305 00:18:44,240 --> 00:18:47,800 Speaker 1: that on to what we call an adult dependent there's 306 00:18:47,840 --> 00:18:49,959 Speaker 1: a tax on that. It's seventeen percent. Is that what 307 00:18:49,960 --> 00:18:50,440 Speaker 1: it works out? 308 00:18:50,480 --> 00:18:57,000 Speaker 2: I know thereabouts it's non dependent MEDICALLYBIA two plus fifteen percent. 309 00:18:57,320 --> 00:19:00,400 Speaker 2: Like I just say one thing there, They balance will 310 00:19:00,400 --> 00:19:06,280 Speaker 2: be probably thirty percent contributions and seventy percent earnings, because 311 00:19:06,280 --> 00:19:11,480 Speaker 2: as the balance grows, the contributions form a smaller component. 312 00:19:11,520 --> 00:19:12,280 Speaker 2: But that's all. 313 00:19:12,119 --> 00:19:16,920 Speaker 1: Taxable, yes, so okay, oh fair enough. So it's the contributions. 314 00:19:17,240 --> 00:19:19,119 Speaker 1: It's that pillar, if you like, the core of the 315 00:19:19,160 --> 00:19:22,880 Speaker 1: contributions that we're talking about here, and the earnings and 316 00:19:22,920 --> 00:19:24,879 Speaker 1: the earnings on them, which is the vast most of 317 00:19:24,880 --> 00:19:25,920 Speaker 1: the money. I spose is it? 318 00:19:26,200 --> 00:19:28,880 Speaker 2: Sure? Say be what a half million of super there's 319 00:19:28,960 --> 00:19:33,840 Speaker 2: eighty five thousand dollars potential death tax on that. Now 320 00:19:33,880 --> 00:19:35,160 Speaker 2: there's ways around it. 321 00:19:35,560 --> 00:19:39,639 Speaker 1: There is ways around us, and they're completely they are 322 00:19:39,880 --> 00:19:43,680 Speaker 1: almost daft. I think they're such a sort of a 323 00:19:43,720 --> 00:19:46,120 Speaker 1: circular thing. But basically what you do is you take 324 00:19:46,119 --> 00:19:48,680 Speaker 1: the super out and your recontributors. Is that right? 325 00:19:49,320 --> 00:19:53,320 Speaker 2: Yes? But that yes true? So once you eat sixty 326 00:19:53,480 --> 00:19:55,240 Speaker 2: you can take your sleeper out of tax free and 327 00:19:55,280 --> 00:19:59,320 Speaker 2: you contribute to a seventy five, so you could take 328 00:19:59,400 --> 00:20:01,680 Speaker 2: if you're balance half a million dollars, you could take 329 00:20:01,720 --> 00:20:04,879 Speaker 2: out three hundred thousand now and put it back. But 330 00:20:04,960 --> 00:20:08,280 Speaker 2: don't forget, the earnings are still taxable on that, and 331 00:20:08,359 --> 00:20:11,880 Speaker 2: you can't specify which part you withdraw. So I've got 332 00:20:11,880 --> 00:20:18,160 Speaker 2: a say eighty percent taxable and twenty percent non taxable, 333 00:20:18,240 --> 00:20:22,159 Speaker 2: then the withdrawals will be in those proportions. The best 334 00:20:22,160 --> 00:20:27,119 Speaker 2: solution is to have your attorney instructed to withdraw the 335 00:20:27,200 --> 00:20:30,200 Speaker 2: money when your death is knee tax free and put 336 00:20:30,200 --> 00:20:31,320 Speaker 2: that in your bank account. 337 00:20:32,359 --> 00:20:34,199 Speaker 1: Yes, do many people do that. 338 00:20:34,840 --> 00:20:37,439 Speaker 2: A woman rode to me this week, sorry how her 339 00:20:37,600 --> 00:20:42,800 Speaker 2: daughter around dad died and the instructions were to go 340 00:20:42,840 --> 00:20:49,080 Speaker 2: straight to mum. Mum died three days later. Now Australian 341 00:20:49,200 --> 00:20:51,639 Speaker 2: super were not prepared to pay the benefit to a 342 00:20:51,680 --> 00:20:56,840 Speaker 2: dead person, so the whole state copped the seventeen percent 343 00:20:57,680 --> 00:21:01,960 Speaker 2: because mum died so fast that there was no time. 344 00:21:02,000 --> 00:21:03,920 Speaker 2: Don't forget, if you're dealing with big funds, it could 345 00:21:03,960 --> 00:21:06,879 Speaker 2: take six months to get the money out, is that right. 346 00:21:07,000 --> 00:21:11,719 Speaker 1: I know they're notorious for their delays and their and 347 00:21:11,760 --> 00:21:14,359 Speaker 1: how slow, and probably it's probably one of the selling 348 00:21:14,400 --> 00:21:19,240 Speaker 1: advantages under underestimated advantages of self managed super funds. But 349 00:21:19,359 --> 00:21:22,000 Speaker 1: absolutely you don't have to deal with all that. But 350 00:21:22,119 --> 00:21:23,760 Speaker 1: just on that, I just one last thing on that. 351 00:21:24,119 --> 00:21:28,960 Speaker 1: I know in principle it sounds terrific, but how often 352 00:21:30,080 --> 00:21:36,240 Speaker 1: can a family member, in good faith persuade someone who's 353 00:21:37,000 --> 00:21:40,600 Speaker 1: literally close to deb to gift all their money. I mean, 354 00:21:41,080 --> 00:21:42,919 Speaker 1: it would be a diplomatic no. 355 00:21:43,480 --> 00:21:47,960 Speaker 2: It's going to the member's bank account. So I've got 356 00:21:47,960 --> 00:21:50,600 Speaker 2: a million dollars in seper say the attorney takes out 357 00:21:50,640 --> 00:21:52,840 Speaker 2: my million tax free and puts a million dollars in 358 00:21:52,920 --> 00:21:56,280 Speaker 2: my bank account, and then the will takes over. 359 00:21:57,800 --> 00:22:02,440 Speaker 1: Yes, yes, okay, I guess it. But still do you 360 00:22:02,480 --> 00:22:05,000 Speaker 1: think it's common that people actually go through that process? 361 00:22:06,080 --> 00:22:09,080 Speaker 2: Well, they don't get around to doing it, that's the 362 00:22:09,119 --> 00:22:13,640 Speaker 2: whole problem. And then, of course, when the guy's close 363 00:22:13,720 --> 00:22:17,119 Speaker 2: to death, they're soel traumatized about is amcamming if they 364 00:22:17,119 --> 00:22:17,919 Speaker 2: still don't do it. 365 00:22:18,560 --> 00:22:20,480 Speaker 1: Of course, that's right. It's very hard to talk about 366 00:22:20,480 --> 00:22:23,800 Speaker 1: things like that at that time. Of course. Okay, one 367 00:22:23,880 --> 00:22:26,280 Speaker 1: last thing, one last thing before we go to questions, 368 00:22:26,359 --> 00:22:27,960 Speaker 1: and we're trying to squeeze in a lot here. But 369 00:22:28,040 --> 00:22:31,919 Speaker 1: about executors, I know you the various points you want 370 00:22:31,960 --> 00:22:34,479 Speaker 1: to make, But I want to say one thing to 371 00:22:34,560 --> 00:22:38,240 Speaker 1: our listeners. If someone asks them, would they be the 372 00:22:38,320 --> 00:22:45,240 Speaker 1: executor on their will? I have heard absolute horror stories 373 00:22:45,960 --> 00:22:49,840 Speaker 1: of people who very casually said of course, and ended 374 00:22:49,920 --> 00:22:52,240 Speaker 1: up being the executor on two or three different wills 375 00:22:52,840 --> 00:22:57,040 Speaker 1: and found themselves in the middle of ferociously feuding families. 376 00:22:57,760 --> 00:23:02,000 Speaker 1: Is there any advice you give two people about the 377 00:23:02,080 --> 00:23:04,080 Speaker 1: whole business of being an executor? 378 00:23:04,560 --> 00:23:07,480 Speaker 2: Well, I think the executive stands in the place of 379 00:23:07,560 --> 00:23:10,920 Speaker 2: the deceased, and I think if you're making a will, 380 00:23:10,960 --> 00:23:13,960 Speaker 2: you've got to make sure the executor is a person 381 00:23:13,960 --> 00:23:17,440 Speaker 2: who can do that. Now, that's pretty okay if you've 382 00:23:17,440 --> 00:23:19,480 Speaker 2: only got a house and super but if you've got 383 00:23:19,520 --> 00:23:23,119 Speaker 2: to say, maybe rental properties and commercial property and stuff, 384 00:23:23,359 --> 00:23:26,560 Speaker 2: there's big decisions to make. In the book, we talk 385 00:23:26,640 --> 00:23:30,000 Speaker 2: about the case for kids and two want to keep 386 00:23:30,040 --> 00:23:33,920 Speaker 2: the family home and too don't. One saying month's promised 387 00:23:33,920 --> 00:23:36,440 Speaker 2: we could mortgage the house for my business. The other 388 00:23:36,560 --> 00:23:42,679 Speaker 2: says no, And then the executive's got to adjudicate. You know, 389 00:23:42,720 --> 00:23:45,320 Speaker 2: I'd be very loath to accept anything as an executor. 390 00:23:45,520 --> 00:23:48,800 Speaker 1: You'd be you'd be very low to accept the task 391 00:23:49,160 --> 00:23:53,120 Speaker 1: in itself with being an executor. Either, do you think 392 00:23:53,119 --> 00:23:54,440 Speaker 1: the person should be a lawyer? 393 00:23:54,920 --> 00:23:57,919 Speaker 2: Well, well, there's lawyers will do it for free. But 394 00:23:58,040 --> 00:24:00,600 Speaker 2: in my own case, I found that old well i'd 395 00:24:00,600 --> 00:24:03,440 Speaker 2: made fifteen years ago. Was I reviewing the current will 396 00:24:04,160 --> 00:24:06,760 Speaker 2: and the people I'd chosen as executives, I would never 397 00:24:06,800 --> 00:24:11,600 Speaker 2: pick now, Well, one turn out to be a dreadful 398 00:24:11,600 --> 00:24:17,440 Speaker 2: stock picker, one is now too old, and one's deceased. 399 00:24:18,400 --> 00:24:20,920 Speaker 2: That's why in keeping the will up to dates important. 400 00:24:21,720 --> 00:24:24,600 Speaker 2: But I also like to say we stress, don't rush. 401 00:24:25,160 --> 00:24:28,320 Speaker 2: I hear time and time again. Dad died. We rushed 402 00:24:28,320 --> 00:24:31,040 Speaker 2: and told the bank. They froze the accounts and we 403 00:24:31,080 --> 00:24:34,600 Speaker 2: couldn't pay for the funeral. You don't need to rush 404 00:24:34,600 --> 00:24:35,320 Speaker 2: and tell the bank. 405 00:24:35,880 --> 00:24:40,000 Speaker 1: Is there a legal requirement about how long you can 406 00:24:40,720 --> 00:24:41,200 Speaker 1: not there? 407 00:24:41,760 --> 00:24:46,040 Speaker 2: But the other big one is most couples exist on 408 00:24:46,880 --> 00:24:53,600 Speaker 2: the husband's superannuation pension. Now he dies, they rush and 409 00:24:53,640 --> 00:24:56,760 Speaker 2: tell the fund freezes the pension. It can take a 410 00:24:56,840 --> 00:25:01,320 Speaker 2: year to revive it. That's a major problem. And also 411 00:25:01,440 --> 00:25:04,960 Speaker 2: a big issue is most people on the age pension 412 00:25:05,240 --> 00:25:09,560 Speaker 2: leave their assets to each other. Now the couple's cut 413 00:25:09,600 --> 00:25:13,120 Speaker 2: off points about a million when the single cutoff points 414 00:25:13,160 --> 00:25:16,880 Speaker 2: about six hundred and eighty thousand dollars. So if you've 415 00:25:16,920 --> 00:25:19,760 Speaker 2: got eight hundred thousand of assets and you're getting your 416 00:25:19,760 --> 00:25:23,760 Speaker 2: part pension and all the benefits, then the husband dies 417 00:25:25,520 --> 00:25:27,639 Speaker 2: and the widow gets all the money, she's over the 418 00:25:27,680 --> 00:25:31,320 Speaker 2: limit and she loses the pension, all these things that 419 00:25:31,320 --> 00:25:33,960 Speaker 2: are so important that and they're all talking about big dollars. 420 00:25:34,000 --> 00:25:37,120 Speaker 2: I mean, these mistakes cost a lot of money. 421 00:25:37,480 --> 00:25:40,199 Speaker 1: Yes, but what could the person one last before we 422 00:25:40,200 --> 00:25:42,160 Speaker 1: go to the big what could the person do? I mean, 423 00:25:42,200 --> 00:25:44,200 Speaker 1: in a way, there's a justification to that. They've just 424 00:25:44,240 --> 00:25:46,320 Speaker 1: picked up a whole pile of money. They don't need 425 00:25:46,359 --> 00:25:47,600 Speaker 1: attention as much as they used to. 426 00:25:48,680 --> 00:25:51,639 Speaker 2: Well, yes, but as much simpler. I always believe the 427 00:25:51,640 --> 00:25:56,080 Speaker 2: same saying that you give with a warm hand. When 428 00:25:56,240 --> 00:25:58,720 Speaker 2: Bill and Mary are doing their will, they could decide 429 00:25:58,760 --> 00:26:01,680 Speaker 2: which kids to leave the money too, and I could 430 00:26:01,760 --> 00:26:04,640 Speaker 2: leave three hundred thousand dollars to the kids and Mom 431 00:26:04,640 --> 00:26:07,960 Speaker 2: would still have six hundred thousand, still get the pension. 432 00:26:08,240 --> 00:26:13,119 Speaker 1: Okay, yeah, just the basic clever, cool, calm assessment of 433 00:26:13,240 --> 00:26:16,439 Speaker 1: the numbers. Very good. Okay, Hey, we'll go to questions. Well, 434 00:26:16,440 --> 00:26:18,040 Speaker 1: take a show break and we'll come back and try 435 00:26:18,040 --> 00:26:21,240 Speaker 1: and get no to do two or three questions from 436 00:26:21,400 --> 00:26:29,040 Speaker 1: our listeners back in a moment. Hello, welcome back to 437 00:26:29,040 --> 00:26:31,720 Speaker 1: The Australian's Money Puzzle. I'm James Kirby talking to No 438 00:26:31,960 --> 00:26:35,000 Speaker 1: fight occur, Okay, no, we'll try. Well, just tye two 439 00:26:35,119 --> 00:26:38,560 Speaker 1: or three of these. David says, I'm moving my super 440 00:26:38,680 --> 00:26:42,080 Speaker 1: from a wrap account to an industry fund. I want 441 00:26:42,119 --> 00:26:45,320 Speaker 1: to ensure that when my accumulation faced super changes to 442 00:26:45,359 --> 00:26:49,320 Speaker 1: accompa's pension within the same provider, it doesn't trigger a 443 00:26:49,400 --> 00:26:54,560 Speaker 1: CGT event. However, reading all the documents, I can't see 444 00:26:54,560 --> 00:26:57,240 Speaker 1: a clear answer to the question. People are always worried 445 00:26:57,240 --> 00:27:01,520 Speaker 1: about that moving money and losing the CGT. You're having 446 00:27:01,560 --> 00:27:03,399 Speaker 1: to pay tax in some fashion. 447 00:27:03,640 --> 00:27:07,119 Speaker 2: It's the main point, James, is their insurance with his 448 00:27:07,280 --> 00:27:12,040 Speaker 2: present fund. If there is will the new fund accept 449 00:27:12,080 --> 00:27:14,600 Speaker 2: the insurance because you can't transfer it. 450 00:27:15,280 --> 00:27:17,560 Speaker 1: Oh, you can transfer your money, but you can't transfer 451 00:27:17,640 --> 00:27:18,280 Speaker 1: your insurance. 452 00:27:18,760 --> 00:27:22,680 Speaker 2: And one of the lawyers was telling me that they're 453 00:27:22,720 --> 00:27:30,240 Speaker 2: acting for a person. He had five super funds. Wife Amalga, 454 00:27:30,280 --> 00:27:34,760 Speaker 2: bade them to save fees because he had cancer, was 455 00:27:34,880 --> 00:27:38,399 Speaker 2: dying and she closed the one fund that had a 456 00:27:38,440 --> 00:27:43,240 Speaker 2: four hundred thousand insurance in it, so they lost to 457 00:27:43,240 --> 00:27:47,359 Speaker 2: four hundred thousand death benefits by moving funds. So the 458 00:27:47,400 --> 00:27:51,560 Speaker 2: first thing is that by moving funds, is insurance an issue? 459 00:27:51,840 --> 00:27:56,199 Speaker 1: Because if you move the fund and the CGT is 460 00:27:56,800 --> 00:27:59,199 Speaker 1: the CGT is clean. I presume that's not an issue 461 00:27:59,800 --> 00:28:00,800 Speaker 1: in this case. 462 00:28:00,640 --> 00:28:02,760 Speaker 2: And say that I can't say there's any issue with keptain. 463 00:28:02,800 --> 00:28:04,560 Speaker 1: Yeah, I wouldn't have thought so, by the way, David, 464 00:28:04,600 --> 00:28:06,840 Speaker 1: and if all the David's out there, this is never advised. 465 00:28:06,840 --> 00:28:09,200 Speaker 1: This is information only. But here's the point that Noel 466 00:28:09,320 --> 00:28:14,960 Speaker 1: is making. If you're choosing between insured super funds, be 467 00:28:15,160 --> 00:28:18,560 Speaker 1: very careful on the insurance because the insurance doesn't transfer 468 00:28:18,640 --> 00:28:20,359 Speaker 1: with you, and when you go to the new fund, 469 00:28:20,640 --> 00:28:22,879 Speaker 1: they're going to make you take all the medical tests 470 00:28:22,920 --> 00:28:25,119 Speaker 1: again and fill out all the forms again. And the 471 00:28:25,240 --> 00:28:28,160 Speaker 1: chances are you're probably not as healthy as you were 472 00:28:28,160 --> 00:28:30,399 Speaker 1: when you signed it the first time, and so your 473 00:28:30,440 --> 00:28:32,640 Speaker 1: insurance would go. What would that be the issue? 474 00:28:32,640 --> 00:28:34,480 Speaker 2: Known spot on? Yeah? 475 00:28:34,720 --> 00:28:37,120 Speaker 1: Yeah, okay, all right, so keep that in mind, David. 476 00:28:37,359 --> 00:28:40,560 Speaker 1: All right, Tina, try and edit Tina a little, Tina, 477 00:28:40,680 --> 00:28:43,800 Speaker 1: my husband and I have a self managed superfund Unlike 478 00:28:43,840 --> 00:28:46,600 Speaker 1: the recommendation of one of your recent guests, we certainly 479 00:28:46,640 --> 00:28:49,400 Speaker 1: didn't have a million in super fund. We set it up. Ah, 480 00:28:49,560 --> 00:28:52,240 Speaker 1: quick question, No, how much do you think someone should 481 00:28:52,280 --> 00:28:54,120 Speaker 1: have to set up a self managed superfund? 482 00:28:55,320 --> 00:28:57,720 Speaker 2: Well, they normally say at least three or four hundred 483 00:28:57,760 --> 00:29:00,640 Speaker 2: thousand dollars. But the mind issue is why do you 484 00:29:00,680 --> 00:29:04,920 Speaker 2: want to self managed fund? I've got one. They're great, 485 00:29:04,960 --> 00:29:10,520 Speaker 2: they're great for business premises perfect, they're very good. If 486 00:29:10,560 --> 00:29:15,120 Speaker 2: you've got I've got money in property syndicates that you'd 487 00:29:15,160 --> 00:29:18,120 Speaker 2: need to self manage fund for that. That's the main thing. 488 00:29:18,160 --> 00:29:22,040 Speaker 2: I think the was that what often happens is that 489 00:29:22,760 --> 00:29:28,560 Speaker 2: the market crashes, your superannuation goes down, no matter who 490 00:29:28,600 --> 00:29:31,280 Speaker 2: it's with, Oh I'll do better meself, and they set 491 00:29:31,320 --> 00:29:35,320 Speaker 2: up a self managed superannuation fund. Of course, more and 492 00:29:35,440 --> 00:29:39,960 Speaker 2: more too. It's normally the bloke runs the fund and 493 00:29:40,000 --> 00:29:44,560 Speaker 2: then he gets dementia and the wife doesn't want it. 494 00:29:44,840 --> 00:29:48,240 Speaker 2: I think they're great in the right circumstances. As we're 495 00:29:48,280 --> 00:29:51,720 Speaker 2: saying before, if you're taking out money fast, it's going 496 00:29:51,800 --> 00:29:54,240 Speaker 2: to be much quicker in the self managed fund. 497 00:29:55,200 --> 00:29:59,680 Speaker 1: So no, what about investment property? I don't mean business 498 00:29:59,680 --> 00:30:02,560 Speaker 1: proper because you mentioned the advantages of a business property. 499 00:30:02,600 --> 00:30:04,640 Speaker 1: Of course, if you put your business in an SMS, 500 00:30:04,680 --> 00:30:08,040 Speaker 1: if it's the great thing. But what about residential investment 501 00:30:08,120 --> 00:30:11,680 Speaker 1: property inside self managed super funds? What do you think 502 00:30:11,680 --> 00:30:12,000 Speaker 1: of that? 503 00:30:12,240 --> 00:30:15,800 Speaker 2: Well, as you know, I don't like residential real estate. 504 00:30:16,600 --> 00:30:19,200 Speaker 1: In the first place, Yes, so you're right, I likely 505 00:30:19,280 --> 00:30:20,520 Speaker 1: to like it in the super fund. 506 00:30:20,720 --> 00:30:22,760 Speaker 2: Yes. But the whole thing is this, you make your 507 00:30:22,760 --> 00:30:28,160 Speaker 2: property by gearing. I'd rather borrow one hundred percent of 508 00:30:28,200 --> 00:30:31,080 Speaker 2: the purchase part of the property fully gear in my 509 00:30:31,200 --> 00:30:35,760 Speaker 2: own name, which you don't get that concession in a superfund. 510 00:30:35,800 --> 00:30:38,640 Speaker 2: It's a much lower rate of tax. Then if I've 511 00:30:38,680 --> 00:30:40,640 Speaker 2: got to sell the property, sell it when I'm old 512 00:30:40,640 --> 00:30:42,360 Speaker 2: and I don't earn any money, you know, I'll be 513 00:30:42,400 --> 00:30:45,600 Speaker 2: in a much lower tax bracket. I'd rather keep your 514 00:30:45,600 --> 00:30:48,560 Speaker 2: real estate out of your sleeper. It's much simpler. 515 00:30:48,720 --> 00:30:52,520 Speaker 1: And the point you're making is that you pay high 516 00:30:52,560 --> 00:30:57,360 Speaker 1: tax as an individual, and the negative gearing is considerable 517 00:30:57,400 --> 00:31:00,280 Speaker 1: because the tax is high. In the super fund, the tax, say, 518 00:31:00,320 --> 00:31:03,080 Speaker 1: is lo so the negative gearing isn't as good. I 519 00:31:03,120 --> 00:31:05,080 Speaker 1: suppose that's it all right, sure. 520 00:31:05,200 --> 00:31:09,240 Speaker 2: But also there's some conment out there the property spreakers. 521 00:31:10,040 --> 00:31:13,800 Speaker 2: It will contact you and say we will start yourself 522 00:31:13,840 --> 00:31:17,680 Speaker 2: many super fan exciousis saper and we will build you 523 00:31:17,880 --> 00:31:21,720 Speaker 2: a property. And that's a recipe for disaster. 524 00:31:21,840 --> 00:31:26,560 Speaker 1: Believe me, I don't disagree with you for one moment. Sure, folks, 525 00:31:26,600 --> 00:31:28,800 Speaker 1: you will never hear them on this show. They'll tell 526 00:31:28,800 --> 00:31:30,560 Speaker 1: you that much. We will not have them on. And 527 00:31:30,600 --> 00:31:34,680 Speaker 1: if I sniff anyone trying that, I will protect our 528 00:31:34,720 --> 00:31:37,560 Speaker 1: listeners on that one. Okay, I think we will leave 529 00:31:37,600 --> 00:31:40,360 Speaker 1: it at that for today, Noel, it's great to talk 530 00:31:40,440 --> 00:31:43,240 Speaker 1: to you. The name of the of the latest book 531 00:31:43,240 --> 00:31:46,080 Speaker 1: from Noel is why don't you tell us what it is? Again? 532 00:31:46,120 --> 00:31:46,640 Speaker 1: Once more? 533 00:31:47,080 --> 00:31:49,760 Speaker 2: Will's Death and Texas made simple. 534 00:31:50,440 --> 00:31:53,120 Speaker 1: Well, well, we'll have you on again. It's been great 535 00:31:53,120 --> 00:31:55,280 Speaker 1: to have you on today. So thank you very much. 536 00:31:55,640 --> 00:31:56,320 Speaker 2: It's a pleasure. 537 00:31:56,360 --> 00:31:59,560 Speaker 1: Thank you and thank you for listening. Everybody, keep those 538 00:32:00,080 --> 00:32:02,560 Speaker 1: email is coming. I have some capacity you now to 539 00:32:02,600 --> 00:32:05,280 Speaker 1: pick up some questions, so let's have them. The money 540 00:32:05,320 --> 00:32:10,320 Speaker 1: puzzle at the Australian dot Com dot Au producer today 541 00:32:10,840 --> 00:32:14,760 Speaker 1: was Leah sam Ogloo, who has done a great job 542 00:32:15,000 --> 00:32:17,960 Speaker 1: both today and over the period when I was away, 543 00:32:18,000 --> 00:32:20,280 Speaker 1: and I want to thank her for that on air. Okay, 544 00:32:20,360 --> 00:32:20,960 Speaker 1: talk to you soon.